Washington State is Bucking the West Coast Exodus Trend

Over the last few years, there has been notable news about California's shrinking population. It has been well known that California has had a massive exodus over the last several decades, but recently they have not had enough newcomers to offset those fleeing the state. The Californication of other states is a well known topic of discussion even here in Washington State.

Another less discussed but equally disturbing trend is the fact that Oregon has now seen a statewide population decline. Much of that is likely driven by the mass exodus in Portland, many of whom fled to Southwest Washington. 

But Washington State has continued its impressive population growth. Although Arizona is growing at a faster clip than we are, we are still growing. Seattle is still growing, despite its problems of late. In fact, Seattle for the first time ever, has a larger population than San Francisco. This is a culmination of strong growth in Seattle and San Francisco's rapidly shrinking population.  

So why is Washington State the ONLY west coast state growing? It's the economy. Many people know that California has a strong economy, but on a per capita basis, Washington's is even stronger. California's economy is growing through mostly inflation at this point as businesses are fleeing that state in mass. Meanwhile, in Washington State new business is arriving to our state. Unfortunately the idiots in Olympia are passing laws that look allot like the failed laws that were passed in California and have led to that state's decline. 

Will Washington continue to grow or is the Californication complete? It is hard to say at this point but locally here in Southwest Washington we are likely to remain in a strong growth mode as we siphon off more and more business and people from Portland.

What does all of this mean for real estate? It means, that outside of a major national recession, we should continue to see favorable growth trends and rising property values. 

Just a little more rate relief is all we need.

After we enjoyed years of sub-market rate interest we have to get used to higher rates. The government as usual displayed poor execution not he rate increase int he summer of 2021. Rather than a gradual climb they did a massive fast increase that startled the real estate market and apply emergency braking in a situation that only needed gentle braking. 

Our market would make a nice mild comeback with a couple of 1/4 point reductions in the average mortgage rate. If we can get a typical 30 year fixed mortgage down to the low sixes, then AAA credit would drop into the high fives and mediocre credit buyers in the upper sixes this market will enjoy more sales. I do not think we will go into a hysterical frenzy, but we certainly will get a much needed boost in volume.

The Fed has moved cautiously towards a rate reduction plan and I believe this will lead to improved volume without any real upward price pressure. Let's hope they don't screw it up like they did in '21. We are moving in the right direction.

SW Washington Market still pretty warm.

Our local market isn't on fire like it was a few years ago, but it remains toasty warm. Inventory levels are creeping up but see favor seller's. The tight lending market however has put the squeeze on buyers so even though inventory is tight the supply of qualified buyers is almost equally tight. It's a bit of a standoff.

Buyers looking for some leverage should look at houses that are a little odd. That house on the flag lot with the bumpy driveway might be a value since most buyers have a difficult time looking past basic curb appeal problems. 

I have a fantastic listing right now well under market but it has an odd entrance and basically no yard. But 2100 squares on one level with 4 beds and 3.5 baths at four and a half is a steal. Some buyers just can't get out of their own way.

Buyers look for these types of properties, they are your ticket to an affordable option in this crazy real estate world we are living in right now.

Think outside the box and you will find a house that gives you most of what you want at a price you can afford.